Gold gained the most in a week as a halt in the dollar's rally may increase demand for the metal as an alternative investment.
The US Dollar Index, a six-currency gauge of the greenback's strength, fell as much as 0.4 per cent after last week climbing to the highest level in almost seven months. Gold futures, which usually move inversely to the dollar, slid 5.8 per cent in three sessions to a three-month low on Feb. 5.
"The dollar is down," said Peter Fertig, the owner of Quantitative Commodity Research Ltd. in Hainburg, Germany. The metal's sudden drop last week is also "a good indicator that prices may rise," he said.
Gold futures for April delivery rose $US13.40, or 1.3 per cent, to $US1066.20 an ounce on the New York Mercantile Exchange's Comex unit. That marks the biggest gain since Feb. 1. Futures declined 2.9 per cent last week, a fourth straight drop.
In London, gold for immediate delivery fell 48 US cents to $US1065.82.
Gold futures' relative strength index, a gauge of whether a commodity or security is overbought or oversold, plunged to 40.32 from 50.08 on Feb. 3. "From a technical perspective, gold was heavily oversold," Fertig said.
